In a July 13 opinion piece in Credit Union Journal, the National Credit Union Administration Board member Todd Harper criticized those credit unions that had garnished members economic impact payments.
While the CARES Act exempted these stimulus payments from being offset for debts owed to federal and state agencies (except for child support), it did not protect these payments from garnishment or the right of offset.
Harper wrote that these payments were meant to cover daily living expenses of credit union members, who had been impacted by COVID-19.
Credit unions that garnished these payments faced potential damage to their reputation and potentially their business model.
He also pointed out that these credit unions could damage the image of the whole industry.
In related news, the Senate voted unanimously on July 23 to pass a bill (S. 3841) that would exempt the CARES Act economic impact payments from assignment or garnishment.
The legislation must still be passed by the House and signed into law in order to protect these payments from garnishment.
Showing posts with label Legislation. Show all posts
Showing posts with label Legislation. Show all posts
Sunday, July 26, 2020
Tuesday, July 21, 2020
House Adds AML Provisions to Defense Bill
With a bipartisan majority of 336 to 71, the House on July 20 voted to add anti-money laundering (AML) provisions to the 2021 National Defense Authorization Act (NDAA).
Financial trade groups had urged House Armed Services Committee leaders to include key anti-money laundering provisions in NDAA. The provisions would direct the Financial Crimes Enforcement Network to establish and maintain a registry of beneficial ownership information and also modernize Treasury authorities and certain anti-money laundering requirements.
The groups noted that these provisions will “assist in preventing money laundering, human trafficking, drug smuggling, terrorism financing, fraud and other illicit activity.”
The House still needs to vote on passage of NDAA, as amended.
Financial trade groups had urged House Armed Services Committee leaders to include key anti-money laundering provisions in NDAA. The provisions would direct the Financial Crimes Enforcement Network to establish and maintain a registry of beneficial ownership information and also modernize Treasury authorities and certain anti-money laundering requirements.
The groups noted that these provisions will “assist in preventing money laundering, human trafficking, drug smuggling, terrorism financing, fraud and other illicit activity.”
The House still needs to vote on passage of NDAA, as amended.
NTU Calls Congress to Enact Reforms
In a July 16 letter to Chairman Crapo (R - ID), Ranking Member Brown (D - OH), Chairwoman Waters (D - CA), and Ranking Member McHenry (R - NC), the National Taxpayers Union (NTU), the nation's oldest taxpayer advocacy organization, called on Congress to enact serious reforms before raising the member business loan (MBL) cap for credit unions to address the economic crisis stemming from COVID-19.
NTU wrote that "Congress has a responsibility to demand enhanced transparency from the credit union industry, examine potential abuses that run counter to an institution’s tax-exempt purpose, and strengthen membership rules."
Specifically, the NTU is urging the Congress enact the following reforms:
NTU stated that it would oppose any legislation to increase the MBL cap, if these reforms are not addressed.
Read the letter.
NTU wrote that "Congress has a responsibility to demand enhanced transparency from the credit union industry, examine potential abuses that run counter to an institution’s tax-exempt purpose, and strengthen membership rules."
Specifically, the NTU is urging the Congress enact the following reforms:
- to require federal credit unions to file Form 990s;
- to subject federal credit unions to Unrelated Business Income Tax;
- to ensure tax parity with other financial institutions; and
- to address field of membership concerns.
NTU stated that it would oppose any legislation to increase the MBL cap, if these reforms are not addressed.
Read the letter.
Tuesday, June 30, 2020
Trade Groups Call for Inclusion of AML Bill in NDAA
In a June 27 letter to Senate Armed Services Committee leaders, seven financial trade organizations called for the inclusion of the Anti-Money Laundering (AML) Act of 2020 as part of the 2021 National Defense Authorization Act (NDAA).
The bill includes critical provisions for law enforcement investigations into organized transnational criminal operations, human trafficking, terrorism financing and other unlawful activity.
Among other things, the bill would direct the Financial Crimes Enforcement Network to create and maintain a secure beneficial ownership registry of legal entities. “The bill strikes the right balance between imposing minimal requirements on small businesses and providing critical information to law enforcement and financial institutions,” the groups wrote. “In addition, if enacted prior to the COVID outbreak, the bill could have assisted financial institution efforts to serve new customers under the Small Business Administration’s Paycheck Protection Program.”
The bill also modernizes anti-money laundering control and processes, enabling financial institutions to better assist law enforcement efforts to detect and deter financial crime and terrorism, the groups noted.
The bill includes critical provisions for law enforcement investigations into organized transnational criminal operations, human trafficking, terrorism financing and other unlawful activity.
Among other things, the bill would direct the Financial Crimes Enforcement Network to create and maintain a secure beneficial ownership registry of legal entities. “The bill strikes the right balance between imposing minimal requirements on small businesses and providing critical information to law enforcement and financial institutions,” the groups wrote. “In addition, if enacted prior to the COVID outbreak, the bill could have assisted financial institution efforts to serve new customers under the Small Business Administration’s Paycheck Protection Program.”
The bill also modernizes anti-money laundering control and processes, enabling financial institutions to better assist law enforcement efforts to detect and deter financial crime and terrorism, the groups noted.
Friday, June 19, 2020
Op-Ed Calls for Equal Treatment of Banks and CUs on Military Bases
In a BankThink op-ed in the American Banker, the CEOs of the American Bankers Association and the Association of Military Banks of America wrote that if Congress truly wanted to help military personnel and their families, it should expand the financial service choices for service members by incentivizing more banks to operate on military bases.
Currently, tax-exempt credit unions are permitted to operate rent-free on military bases, while taxpaying banks do not. The authors argued that banks and credit unions should be granted equal treatment with regard to serving service members.
“As the Senate and House begin their work reauthorizing the National Defense Authorization Act, lawmakers must make this sensible change and push back against credit union lobbying that only limits the financial choices for service members and their families.”
The op-ed also noted that the recent decision by the National Credit Union Administration to presume all active duty military personnel as low-income does not provide any tangible benefits to struggling service members.
Read the op-ed.
Currently, tax-exempt credit unions are permitted to operate rent-free on military bases, while taxpaying banks do not. The authors argued that banks and credit unions should be granted equal treatment with regard to serving service members.
“As the Senate and House begin their work reauthorizing the National Defense Authorization Act, lawmakers must make this sensible change and push back against credit union lobbying that only limits the financial choices for service members and their families.”
The op-ed also noted that the recent decision by the National Credit Union Administration to presume all active duty military personnel as low-income does not provide any tangible benefits to struggling service members.
Read the op-ed.
Friday, May 29, 2020
Coalition Writes Congress for Liability Protection as Economy Reopens from COVID-19 Pandemic
A diverse coalition of over 200 trade associations and other organizations, including bank and credit union trade groups, wrote lawmakers on May 27 to enact “temporary and targeted liability relief legislation” to safeguard businesses, nonprofits and others from frivolous lawsuits as employees return to workplaces.
“Absent a targeted safe harbor for those that work to follow applicable guidelines, the fear and uncertainty from boundless liability threatens to impede our country’s social and economic recovery,” the groups wrote. “In the wake of prior crises, Congress came together to pass timely and targeted liability protections with strong bipartisan support because lawmakers understood the acute economic threat of lawsuits at moments of maximum economic vulnerability.”
The groups stated that these protections would be “limited in scope and preserve recourse for those harmed by truly bad actors who engage in egregious misconduct.”
Read the letter.
“Absent a targeted safe harbor for those that work to follow applicable guidelines, the fear and uncertainty from boundless liability threatens to impede our country’s social and economic recovery,” the groups wrote. “In the wake of prior crises, Congress came together to pass timely and targeted liability protections with strong bipartisan support because lawmakers understood the acute economic threat of lawsuits at moments of maximum economic vulnerability.”
The groups stated that these protections would be “limited in scope and preserve recourse for those harmed by truly bad actors who engage in egregious misconduct.”
Read the letter.
Tuesday, May 12, 2020
Bills Exempt Business Loans Made During Pandemic Emergency from MBL Cap
Legislation has been introduced in the House of Representatives and the Senate that will exempt business loans made during the COVID-19 pandemic from the aggregate member business loan (MBL) cap.
Representative Brad Sherman (D - CA) introduced on May 8 legislation (HR 6789) to exempt business loans originated by insured credit unions during the COVID-19 pandemic from the aggregate member business loan (MBL) cap until one year after the end of the COVID-19 emergency declaration.
The aggregate MBL cap for credit unions is 12.25 percent of assets.
The COVID-19 emergency declaration occurred on March 13, 2020.
The bill also extends temporary provisions dealing with the Central Liquidity Facility in the CARES Act, which were scheduled to expire at the end of 2020. The CARES Act expanded access to and increased the borrowing authority for the Central Liquidity Facility.
Co-sponsors of the bill include Reps. Don Young (R-AK), Brian Fitzpatrick (R-PA), Maxine Waters (D-CA), Suzanne Bonamici (D-OR), Vicente Gonzalez (D-TX), Eleanor Holmes Norton (D-DC), Joe Neguse (D-CO), J. Luis Correa (D-CA), Alan Lowenthal (D-CA), Jeff Van Drew (R-NJ) and David Trone (D-MD).
Senator Ron Wyden (D-OR) announced his intention to introduce a companion bill that would exempt the extension of credit to aid in the recovery of the COVID-19 emergency from the definition of a member business loan and thereby the MBL cap for one year. The bill states that the extension of credit must occur before the end of the one-year period beginning on March 13, 2020.
Representative Brad Sherman (D - CA) introduced on May 8 legislation (HR 6789) to exempt business loans originated by insured credit unions during the COVID-19 pandemic from the aggregate member business loan (MBL) cap until one year after the end of the COVID-19 emergency declaration.
The aggregate MBL cap for credit unions is 12.25 percent of assets.
The COVID-19 emergency declaration occurred on March 13, 2020.
The bill also extends temporary provisions dealing with the Central Liquidity Facility in the CARES Act, which were scheduled to expire at the end of 2020. The CARES Act expanded access to and increased the borrowing authority for the Central Liquidity Facility.
Co-sponsors of the bill include Reps. Don Young (R-AK), Brian Fitzpatrick (R-PA), Maxine Waters (D-CA), Suzanne Bonamici (D-OR), Vicente Gonzalez (D-TX), Eleanor Holmes Norton (D-DC), Joe Neguse (D-CO), J. Luis Correa (D-CA), Alan Lowenthal (D-CA), Jeff Van Drew (R-NJ) and David Trone (D-MD).
Senator Ron Wyden (D-OR) announced his intention to introduce a companion bill that would exempt the extension of credit to aid in the recovery of the COVID-19 emergency from the definition of a member business loan and thereby the MBL cap for one year. The bill states that the extension of credit must occur before the end of the one-year period beginning on March 13, 2020.
Friday, May 1, 2020
NCUA Writes Senator Crapo with Legislative Recommendations
In an April 29 letter to Senator Crapo (R-ID), National Credit Union Administration (NCUA) Chairman Rodney Hood identified legislative changes that would benefit the agency during the coronavirus-induced recession.
The recommended legislative changes can be divided into four areas: improving liquidity for credit unions, providing capital relief to credit unions, enhancing community lending activities, and increasing access for remote financial services delivery for credit unions.
Some of these recommended changes are temporary, while others are permanent.
For example, some of the temporary legislative recommendations sought by NCUA are:
Other permanent changes to the Federal Credit Union Act include allowing all federal credit unions, just not multiple common-bond federal credit unions, to add underserved areas and to eliminate or significantly modify the reasonable proximity requirement to a service facility for a multiple common-bond federal credit union to serve select employee groups and associations.
Read the letter.
The recommended legislative changes can be divided into four areas: improving liquidity for credit unions, providing capital relief to credit unions, enhancing community lending activities, and increasing access for remote financial services delivery for credit unions.
Some of these recommended changes are temporary, while others are permanent.
For example, some of the temporary legislative recommendations sought by NCUA are:
- to lower the net worth ratio for credit unions to be well capitalized and adequately capitalized from 7 percent to 6 percent and from 6 percent to 5 percent, respectively.
- to raise the member business loan cap from 12.25 percent of assets to 20 percent assets during the recovery period.
Other permanent changes to the Federal Credit Union Act include allowing all federal credit unions, just not multiple common-bond federal credit unions, to add underserved areas and to eliminate or significantly modify the reasonable proximity requirement to a service facility for a multiple common-bond federal credit union to serve select employee groups and associations.
Read the letter.
Monday, April 27, 2020
Bill Would Exclude Business Loans from MBL Cap for 3 Years
Representative Brad Sherman (D-CA) on April 17 introduced a bill (H.R. 6550) that will provide an exception from the aggregate member business loan (MBL) cap for loans made to aid in the recovery from the COVID-19 emergency.
The bill will exclude any member business loan from the aggregate MBL cap that is originated during a three-year period beginning on March 13, 2020.
The only caveat in the bill is that the extension of credit does not seriously threaten the safety and soundness of an insured credit union.
In aggregate, MBLs are capped at 12.25 percent of assets under current law.
However, roughly half of all credit unions are not subject to the MBL cap; because they have either a low income designation or have a history of making business loans or were chartered for the purpose of making business loans.
If this bill becomes law, I will be interested in seeing whether this program sunsets in three years.
As Milton Friedman said, "Nothing is so permanent as a temporary government program."
Read the bill's text.
The bill will exclude any member business loan from the aggregate MBL cap that is originated during a three-year period beginning on March 13, 2020.
The only caveat in the bill is that the extension of credit does not seriously threaten the safety and soundness of an insured credit union.
In aggregate, MBLs are capped at 12.25 percent of assets under current law.
However, roughly half of all credit unions are not subject to the MBL cap; because they have either a low income designation or have a history of making business loans or were chartered for the purpose of making business loans.
If this bill becomes law, I will be interested in seeing whether this program sunsets in three years.
As Milton Friedman said, "Nothing is so permanent as a temporary government program."
Read the bill's text.
Tuesday, April 21, 2020
$60 Billion in PPP Funds Set Aside for Banks and CUs with $50 Billion or Less in Assets
The Senate this afternoon unanimously passed legislation to provide more than $320 billion in new funding for the Small Business Administration’s Paycheck Protection Program (PPP). The House must now approve the bill, which it is expected to do in a floor vote later this week.
Of the more than $320 billion appropriated for PPP loans, a minimum of $30 billion will be set aside for community development financial institutions, banks and credit unions with less than $10 billion in assets. Another $30 billion at least will go to banks and credit unions with assets between $10 billion and $50 billion.
Institutions in these categories may originate PPP loans above these levels.
Of the more than $320 billion appropriated for PPP loans, a minimum of $30 billion will be set aside for community development financial institutions, banks and credit unions with less than $10 billion in assets. Another $30 billion at least will go to banks and credit unions with assets between $10 billion and $50 billion.
Institutions in these categories may originate PPP loans above these levels.
NCUA Board Members Offer Legislative Recommendations
In their opening statements at the April 16 National Credit Union Administration (NCUA) Board meeting, Board Members J. Mark McWatters and Todd Harper offered suggestions for legislation that he stated would benefit credit unions during the COVID-19 pandemic and beyond.
Both Harper and McWatters recommended that Congress allow all federal credit unions, not just multiple common-bond credit unions, to serve underserved areas in their field of membership, provide an additional $10 million in appropriations for the Community Development Revolving Loan Fund, and grantg NCUA with the authority to supervise third-party vendors.
With regard to member business loans, McWatters called on Congress to raise or eliminate the member business loan cap of 12.25 percent of assets, while Harper stated that Congress should temporarily allow all member business loans made on or before the start of the COVID-19 public health emergency through December 31, 2020, be exempt from the member business lending cap.
Both recommended restructuring the Central Liquidity Facility (CLF). Harper called on Congress to make permanent or extend the temporary changes to the CLF that are scheduled to expire on December 31, 2020. McWatters advocated for the creation of a permanent, separate and robust, standby liquidity facility for the NCUA to employ as needed or the permanent restructuring of the Central Liquidity Facility (CLF) to create the same.
Additionally, McWatters called on Congress to enact capital reforms to assist credit unions that may experience a downtick in their capital during the economic downturn. McWatters was not specific on the nature of these capital reforms.
Read the statement.
Both Harper and McWatters recommended that Congress allow all federal credit unions, not just multiple common-bond credit unions, to serve underserved areas in their field of membership, provide an additional $10 million in appropriations for the Community Development Revolving Loan Fund, and grantg NCUA with the authority to supervise third-party vendors.
With regard to member business loans, McWatters called on Congress to raise or eliminate the member business loan cap of 12.25 percent of assets, while Harper stated that Congress should temporarily allow all member business loans made on or before the start of the COVID-19 public health emergency through December 31, 2020, be exempt from the member business lending cap.
Both recommended restructuring the Central Liquidity Facility (CLF). Harper called on Congress to make permanent or extend the temporary changes to the CLF that are scheduled to expire on December 31, 2020. McWatters advocated for the creation of a permanent, separate and robust, standby liquidity facility for the NCUA to employ as needed or the permanent restructuring of the Central Liquidity Facility (CLF) to create the same.
Additionally, McWatters called on Congress to enact capital reforms to assist credit unions that may experience a downtick in their capital during the economic downturn. McWatters was not specific on the nature of these capital reforms.
Read the statement.
Monday, April 13, 2020
Vystar and City of Jacksonville to Provide Support to Small Businesses Impacted by Coronavirus
The City of Jacksonville (Florida) and Vystar Credit Union (Jacksonville, FL) have entered into a public-private partnership program to support local small businesses affected by the coronavirus.
Vystar Credit Union has set aside $50 million for small business loans.
Under the credit union's COVID-19 Small Business Relief Loan Program, small businesses located in Duval County can apply for loans up to $100,000 at a 5.99 percent interest rate. The loan will be interest only during the first year. If the loan application is approved, the first 3,000 loan recipients will get a $1,000 grant from the city.
VyStar will waive the $250 loan underwriting fee for loans under $5,000. The city will pay the fee for loans above $5,000.
The city will cover 100 percent of the loan interest payments in the first year. In years two through six, the city will provide grants to cover interest costs, if businesses retain at least 50 percent of their pre-coronavirus workforce.
If the grant recipient retains 100 percent of its pre-coronavirus workforce, the small business will receive principal forgiveness during years 2 through 6 of 10 percent annually.
The city is allocating $9 million from the city’s general fund for the first year of the COVID-19 Small Business Relief & Employee Retention Grant Program. The maximum funding for the program will be $26 million over six years.
The credit union will administer the program for the city.
The Ordinance creating the program was passed unanimously by the City Council on April 6.
Read more.
Vystar Credit Union has set aside $50 million for small business loans.
Under the credit union's COVID-19 Small Business Relief Loan Program, small businesses located in Duval County can apply for loans up to $100,000 at a 5.99 percent interest rate. The loan will be interest only during the first year. If the loan application is approved, the first 3,000 loan recipients will get a $1,000 grant from the city.
VyStar will waive the $250 loan underwriting fee for loans under $5,000. The city will pay the fee for loans above $5,000.
The city will cover 100 percent of the loan interest payments in the first year. In years two through six, the city will provide grants to cover interest costs, if businesses retain at least 50 percent of their pre-coronavirus workforce.
If the grant recipient retains 100 percent of its pre-coronavirus workforce, the small business will receive principal forgiveness during years 2 through 6 of 10 percent annually.
The city is allocating $9 million from the city’s general fund for the first year of the COVID-19 Small Business Relief & Employee Retention Grant Program. The maximum funding for the program will be $26 million over six years.
The credit union will administer the program for the city.
The Ordinance creating the program was passed unanimously by the City Council on April 6.
Read more.
Monday, March 23, 2020
CUNA Uses Coronavirus to Push Legislative Priorities
Rahm Emanuel is quoted as saying "You never want a serious crisis to go to waste."
It appears that the Credit Union National Association (CUNA) has taken his quote to heart.
The credit union trade group is using the coronavirus to push their agenda to increase the ability of credit unions to make business loans and gain access to secondary capital.
In a March 19 letter to Congress, CUNA urged Congress to:
Read the letter.
It appears that the Credit Union National Association (CUNA) has taken his quote to heart.
The credit union trade group is using the coronavirus to push their agenda to increase the ability of credit unions to make business loans and gain access to secondary capital.
In a March 19 letter to Congress, CUNA urged Congress to:
- Enact legislation exempting credit union business loans made during federally declared disasters and emergencies from the Credit Union Member Business Lending Cap;
- Enact legislation to exempt fully government-guaranteed loans made through programs at the Small Business Administration, Department of Agriculture and other agencies from the Credit Union Member Business Lending Cap; and
- Ensure that any new small business lending programs created through the Small Business Administration or other government agencies include an opportunity for credit unions to participate.
Read the letter.
Friday, March 13, 2020
Trade Groups: G-Fees Should Not Be Used as Budget Offsets
A broad coalition of housing and finance trade organizations in a letter to congressional leaders on March 6 urged them not to use Fannie Mae and Freddie Mac guarantee fees as a source of funding offsets. The groups warned lawmakers increasing g-fees for that purpose would effectively serve as a tax on potential homebuyers and homeowners seeking to refinance their mortgages.
“G-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses,” the groups wrote. “Our organizations have united to emphatically let lawmakers know that homeownership cannot, and must not, be used as the nation’s ‘piggy bank.’”
The groups urged lawmakers to consider bipartisan legislation that was introduced in the 116th Congress by Sens. David Perdue (R-Ga.), Robert Menendez (D-N.J.), Reps. Brad Sherman (D-Calif.) and Lee Zeldin (R-N.Y.) that would prohibit the use of g-fees as a budgetary offset.
Read the letter.
“G-fees should only be used as originally intended: as a critical risk management tool to protect against potential mortgage credit losses,” the groups wrote. “Our organizations have united to emphatically let lawmakers know that homeownership cannot, and must not, be used as the nation’s ‘piggy bank.’”
The groups urged lawmakers to consider bipartisan legislation that was introduced in the 116th Congress by Sens. David Perdue (R-Ga.), Robert Menendez (D-N.J.), Reps. Brad Sherman (D-Calif.) and Lee Zeldin (R-N.Y.) that would prohibit the use of g-fees as a budgetary offset.
Read the letter.
Friday, March 6, 2020
Senate Bill Will Increase Maturity Cap on Certain CU Loans
U.S. Senators Tim Scott (R-SC) and Catherine Cortez Masto (D-NV) introduced the Expanding Access to Lending Options Act (S.3389) on March 4.
The bill amends the Federal Credit Union Act allowing the maturity on certain credit union loans to be adjusted from the current loan maturity cap of 15 years to 20 years at the discretion of the National Credit Union Administration Board.
Read the press release.
The bill amends the Federal Credit Union Act allowing the maturity on certain credit union loans to be adjusted from the current loan maturity cap of 15 years to 20 years at the discretion of the National Credit Union Administration Board.
Read the press release.
Monday, March 2, 2020
3 CU Bills Introduced to Modernize CU Governance
Three credit union bills were introduced during the last week of February in Congress addressing credit union governance issues.
Senators Tina Smith (D-MN) and Ben Sasse (R-NE) introduced bipartisan legislation -- the Credit Union Governance Modernization Act (S. 3323) -- that would make credit unions safer for employees and members, and simplify rules for credit union operations.
The measure would allow federal credit unions to expel members for violations of credit union policies, without requiring a vote of membership. Under current law, a federal credit union must hold of a vote of its entire membership before it can expel a member who engages in unacceptable, sometimes dangerous behavior. (Read the press release).
In addition, Senators Thom Tillis (R-NC) and Richard Burr (R-NC)introduced a bill -- the Credit Union Modernization Act (S. 3326) -- that would remove outdated responsibilities of boards of directors of Federal credit unions.
Representatives Katie Porter (D-CA) and Mark Amodei (R-NV) introduced the Credit Union Board Modernization Act (H.R. 5981) on February 26. The bill would modify the Federal Credit Union Act requirement that credit union boards meet once a month to not more than six times per year. The bill also requires that credit union boards meet at least once each fiscal quarter.
Senators Tina Smith (D-MN) and Ben Sasse (R-NE) introduced bipartisan legislation -- the Credit Union Governance Modernization Act (S. 3323) -- that would make credit unions safer for employees and members, and simplify rules for credit union operations.
The measure would allow federal credit unions to expel members for violations of credit union policies, without requiring a vote of membership. Under current law, a federal credit union must hold of a vote of its entire membership before it can expel a member who engages in unacceptable, sometimes dangerous behavior. (Read the press release).
In addition, Senators Thom Tillis (R-NC) and Richard Burr (R-NC)introduced a bill -- the Credit Union Modernization Act (S. 3326) -- that would remove outdated responsibilities of boards of directors of Federal credit unions.
Representatives Katie Porter (D-CA) and Mark Amodei (R-NV) introduced the Credit Union Board Modernization Act (H.R. 5981) on February 26. The bill would modify the Federal Credit Union Act requirement that credit union boards meet once a month to not more than six times per year. The bill also requires that credit union boards meet at least once each fiscal quarter.
Tuesday, February 11, 2020
Virginia Bill Would Allow CUs to Pay Board of Directors
A bill (HB813) in the Virginia legislature will permit Virginia state chartered credit unions to pay members of the board of directors and credit and supervisory committees.
The bill would require the board of directors to develop a written policy regarding compensation.
Total annual compensation to individual board or committee members cannot exceed $6,000.
The bill excludes accident, health, and term life insurance for a director or committee member will not be considered compensation.
Also, directors and committee members may be reimbursed for expenses, while on official credit union business.
The bill unanimously passed the Virginia House of Delegates.
Read more.
The bill would require the board of directors to develop a written policy regarding compensation.
Total annual compensation to individual board or committee members cannot exceed $6,000.
The bill excludes accident, health, and term life insurance for a director or committee member will not be considered compensation.
Also, directors and committee members may be reimbursed for expenses, while on official credit union business.
The bill unanimously passed the Virginia House of Delegates.
Read more.
Tuesday, December 17, 2019
NY CUs Gain Access to State's Banking Development District Program
New York Governor Andrew Cuomo on December 12 signed into law legislation, S.727-A/A.3320, that will allow credit unions to participate in the state Banking Development District (BDD) Program.
The BDD Program was created in 1997 to encourage financial institutions to establish branches in economically distressed communities throughout New York where there is a demonstrated need for banking services.
Institutions that are approved for a BDD designation are eligible to receive up to $10 million in subsidized public deposits and other benefits, including below market-rate deposits from New York state. These deposits are intended to lower the financial risk that the branch may incur when opening in an underserved community.
The legislation will mark the first time in state history that credit unions will be permitted to receive public deposits.
Read the memo on the legislation.
The BDD Program was created in 1997 to encourage financial institutions to establish branches in economically distressed communities throughout New York where there is a demonstrated need for banking services.
Institutions that are approved for a BDD designation are eligible to receive up to $10 million in subsidized public deposits and other benefits, including below market-rate deposits from New York state. These deposits are intended to lower the financial risk that the branch may incur when opening in an underserved community.
The legislation will mark the first time in state history that credit unions will be permitted to receive public deposits.
Read the memo on the legislation.
Monday, December 16, 2019
Coalition Wrote Senate to Pass the SAFE Act
A coalition of financial services and housing groups in a letter to Senate Banking Committee leaders on December 12 wrote urging them to provide a safe harbor for depository institutions seeking to serve legitimate cannabis related businesses in states where such activity is legal.
The groups urged lawmakers to pass the SAFE Banking Act—the bipartisan bill that was passed by the House earlier this year by a vote of 321 to 103—or a similar measure in the coming days.
“A safe harbor will enable law enforcement and states to effectively monitor and regulate businesses while simultaneously bringing billions into the regulated banking sector,” the groups wrote. “The SAFE Banking Act is a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”
Read the letter.
The groups urged lawmakers to pass the SAFE Banking Act—the bipartisan bill that was passed by the House earlier this year by a vote of 321 to 103—or a similar measure in the coming days.
“A safe harbor will enable law enforcement and states to effectively monitor and regulate businesses while simultaneously bringing billions into the regulated banking sector,” the groups wrote. “The SAFE Banking Act is a critical first step to ensure that legal cannabis marketplaces are safe, legal, and transparent.”
Read the letter.
Tuesday, November 12, 2019
Bill Would Exempt Veteran-Owned Businesses from MBL Cap
Sens. Dan Sullivan (R-Alaska) and Mazie Hirono (D-Hawaii) introduced a bill on November 12 to exempt loans made to veteran-owned businesses from a credit union’s member business lending (MBL) cap, the Veterans Member Business Loan Act (S. 2834).
The MBL cap is 12.25 percent of assets.
A similar bill was introduced earlier this year in the House of Representatives.
The MBL cap is 12.25 percent of assets.
A similar bill was introduced earlier this year in the House of Representatives.
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